Ask Question
22 August, 15:26

A new machine comes with 200 free service hours over the first year. Additional time costs $150 per hour. What are the average and marginal costs per hour for the following quantities? a) 125 b) 225 c) 325

+4
Answers (1)
  1. 22 August, 16:13
    0
    (a) 0; 0

    (b) $150 per hour; $16.67 per hour

    (c) (b) $150 per hour; $53.57 per hour

    Explanation:

    (a) Number of hours = 125

    Marginal cost = 0 (since service is cost less upto 200 hours)

    Average cost = 0

    (b) Number of hours = 225

    Marginal cost = $150 per hour

    Total cost = $150 * (225 - 200)

    = $150 * 25

    = $3,750

    Average cost = Total cost : Number of hours

    = $3,750 : 225

    = $16.67 per hour

    (c) Number of hours = 325

    Marginal cost = $150 per hour

    Total cost = $150 * (325 - 200)

    = $150 * 125

    = $18,750

    Average cost = Total cost : Number of hours

    = $18,750 : 325

    = $53.57 per hour
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “A new machine comes with 200 free service hours over the first year. Additional time costs $150 per hour. What are the average and marginal ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers